By Kim Hyo-jin
The National Assembly ratified a free trade agreement (FTA) with China, Monday, after weeks of tug-of-war negotiations over how to protect farming and other industries that will suffer from the deal.
The Assembly also approved free trade deals with Vietnam and New Zealand, signed in March and May, at a plenary session.
The motion on the FTA with China was passed by 196 votes in favor, 33 votes against and 36 abstentions.
The Korea-China FTA is expected to become effective in December, following completion of the required administrative procedures in both countries.
The parliamentary approval came almost six months after President Park Geun-hye and her Chinese counterpart Xi Jinping signed the agreement on June 1.
“The government plans to wrap up the domestic administrative procedure within 20 days,” said Deputy Trade Minister Woo Tae-hee, who led Korea’s negotiations with China during a press briefing.
“The Chinese government decided to skip the process in the National People’s Congress and deal with the agreement directly in the state council,” he added, indicating that the domestic procedure in China will also take less than a month.
The ratification came after rival parties agreed on supplementary measures for the agricultural and fisheries industries that will be adversely affected by the FTA.
Earlier in the day, a consultative body consisting of members of the ruling Saenuri Party, the main opposition New Politics Alliance for Democracy (NPAD) and the government agreed to allocate 1 trillion won ($864 million) in funding over the next 10 years to support the hard-hit industries.
The funds will be raised by donations from private and public companies such as the National Agricultural Cooperative Federation (NACF) and National Federation of Fisheries Cooperatives (NFFC). If the target amount is not accumulated, the government will supplement the difference, according to the agreed plan.
The body also agreed to strengthen government support for losses incurred by reduced sales of agricultural products by raising the compensation rate from 90 to 95 percent of the original price. It further lowered the interest rates on bank loans for farmers and fishermen who want to set up infrastructure from 2.5 to 2 percent.
Later, the rival parties endorsed the agreement approved by the consultative body during internal meetings and the final agreement to ratify the deal during the plenary session was reached between party leaders, just two hours before the session was held.
During the past few months, the NPAD remained adamant that the government should first set up adequate financial support for agriculture and other industries. Meanwhile, the ruling Saenuri Party and the government pushed for ratification of the deal within this year to maximize benefits from tariff cuts.
Under the FTA, the export tariff on 958 products will be cut immediately to zero and the annual-stage reductions of other tariffs will occur in five to 20 years time.
They said that if the deal became effective by the end of this year, the first round of tariff cuts would apply immediately, and a second round of reductions will follow at the start of next year. The country can enjoy the effect of tariff cuts amounting to 1.5 trillion won if the deal is implemented, according to the finance ministry.
Amid rising calls in the economic sector and the governing camp, the NPAD initiated negotiations with the Saenuri Party and the government Friday and reached a final agreement Monday.
“The agreed plan is insufficient. But we had to take into account the hectic schedule and compromise with the government and the ruling party who set the final deadline for today,” NPAD floor leader Lee Jong-kul said during a party meeting.